LCNB Corp. Reports Financial Results for the Three Months Ended March 31, 2024

Non-interest income increased 9.7% year-over-year to $3.9 million

Strengthening balance sheet as cash and cash equivalents grew by 3.4% and debt and equity securities decreased by 6.5%

Asset quality remains excellent with total nonperforming loans to total loans of 0.20% at March 31, 2024

LCNB successfully completed the Eagle Financial Bancorp, Inc. acquisition on April 12, 2024

Management expects earnings growth will reaccelerate in the fourth quarter of 2024

LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three months ended March 31, 2024.

Commenting on the financial results, LCNB President and Chief Executive Officer, Eric Meilstrup said, “Our first quarter performance reflects our near-term focus on integrating the November 2023 Cincinnati Federal acquisition and completing the merger with Eagle Financial Bancorp, Inc. (“EFBI” or “Eagle”), which I am pleased to report closed on April 12, 2024. I am excited by the opportunities underway to leverage the benefits of these two acquisitions and serve compelling communities within the greater Cincinnati region. While we expect one-time merger-related expenses will continue throughout the first half of 2024, we believe we are well positioned for earnings growth to reaccelerate in the fourth quarter of 2024.”

“We are simultaneously pursuing organic growth opportunities while providing our communities with best-in-class and local financial services. Total assets managed by LCNB Wealth Management increased 19.4% year-over-year and are up 8.6% over the past three months. The continued growth of LCNB Wealth Management demonstrates the value our financial, trust, and investment products provide to our local communities,” Mr. Meilstrup continued.

“In addition to the growth strategies underway, we are also focused on maintaining excellent asset quality and pursuing initiatives that strengthen our balance sheet. As we successfully execute these actions over the coming quarters, we believe we will enhance our earnings power, strengthen our competitive advantage, and position LCNB National Bank for long-term success. I am proud of the direction LCNB is headed, and I look forward to updating shareholders on the progress we are making,” concluded Mr. Meilstrup.

Income Statement

Net income for the 2024 first quarter was $1.9 million, compared to net income of $4.2 million for the same period last year. Earnings per basic and diluted share for the 2024 first quarter were $0.15, compared to $0.37 for the same period last year.

Adjusted net income accounts for the impact of one-time merger-related expenses, net of tax, associated with the Cincinnati Federal and EFBI acquisitions. Adjusted net income for the 2024 first quarter was $2.6 million, or $0.20 per diluted share, compared to $4.2 million, or $0.37 per diluted share, for the same period last year.

Net interest income for the three months ended March 31, 2024, was $13.9 million, compared to $13.9 million for the comparable period in 2023. An increase in interest income from loans due to a higher volume of average loans outstanding and the average rates earned on these loans was offset by increased interest expense from higher IRA and time certificate balances, increased long-term debt, and interest rate-related variances.

For the 2024 first quarter, LCNB’s tax equivalent net interest margin was 2.73%, compared to 3.28% for the same period last year. The decrease in the net interest margin reflects the current interest rate environment. As depositors moved funds from non-interest bearing deposits into higher rate products, the average rate paid on interest-bearing liabilities increased 142 basis points. During the same period, the average rate earned from interest-earning assets increased a more gradual 66 basis points.

Non-interest income for the three months ended March 31, 2024 was $3.9 million, compared to $3.6 million for the same period last year. The increase in non-interest income for the three-month period was primarily due to higher fiduciary income and higher gains on sales of loans due to a higher volume of loans sold. Management considers various factors when determining the volume of loans to sell, including liquidity needs and sources and pricing available in the secondary market. LCNB's inventory of new loans is also a factor. The first quarter 2024 was the first quarter that LCNB operated in the expanded market it obtained through the merger with Cincinnati Federal. Partially offsetting the increases in non-interest income during the quarter was a $214,000 pretax loss on the sale of approximately $9.8 million of debt securities.

Non-interest expense for the three months ended March 31, 2024 was $2.9 million higher than the comparable period in 2023, primarily due to higher personnel and operating expenses primarily associated with the integration of Cincinnati Federal and $775,000 of one-time expenses associated with the Cincinnati Federal and EFBI acquisitions.

Capital Allocation

During the three months ended March 31, 2024, LCNB did not repurchase any of its outstanding shares. At March 31, 2024, LCNB had 315,047 shares remaining under its February 2023 share repurchase program.

For the first quarter ended March 31, 2024, LCNB paid $0.22 per share in dividends, a 4.8% increase from $0.21 per share in the first quarter of last year.

Balance Sheet

Total assets at March 31, 2024 increased 18.6% to $2.28 billion from $1.92 billion at March 31, 2023. Net loans at March 31, 2024 increased 18.7% to $1.65 billion, compared to $1.39 billion at March 31, 2023. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Cincinnati Federal acquisition. Not including the Cincinnati Federal acquisition, total net loans increased 2.0% organically, or by $27.8 million from the same period a year ago.

Loans held for sale totaled $75.6 million at March 31, 2024 and are primarily composed of loans scheduled to be sold to an investor during the second quarter of 2024. LCNB anticipates that proceeds from the sale will be used for general corporate purposes, which may include supporting loan growth, paying down short-term borrowings and long-term debt, and adding to liquidity balances.

Total deposits at March 31, 2024 increased 15.9% to $1.86 billion, compared to $1.60 billion at March 31, 2023. Not including the Cincinnati Federal acquisition, total deposits increased 4.5% organically, or by $71.4 million since March 31, 2023.

Assets Under Management

Total assets managed at March 31, 2024 were a record $3.98 billion, compared to $3.16 billion at March 31, 2023. The year-over-year increase in total assets managed was primarily due to the Cincinnati Federal acquisition and organic growth in LCNB Corp. total assets, trust and investments, and brokerage accounts. Organically, trust and investments and brokerage accounts increased due to a higher number of new LCNB Wealth Management customer accounts and an increase in the fair value of managed assets. Mortgage loans serviced increased primarily due to the Cincinnati Federal acquisition.

Asset Quality

For the 2024 first quarter, LCNB recorded a provision for credit losses of $125,000, compared to a recovery of credit losses of $57,000 for the 2023 first quarter.

Net charge-offs for the 2024 first quarter were $45,000, or 0.01% of average loans, compared to net charge-offs of $16,000, or 0.00% of average loans, annualized, for the same period last year.

Total nonperforming loans, which include non-accrual loans and loans past due 90 days or more and still accruing interest, were $3.2 million, or 0.19% of total loans at March 31, 2024, compared to $701,000 or 0.05% of total loans at March 31, 2023. The year-over-year increase in nonaccrual loans was primarily due to one commercial real estate relationship, representing a balance of $2.6 million. The nonperforming assets to total assets ratio was 0.14% at March 31, 2024, compared to 0.04% at March 31, 2023.

Merger Agreement with Eagle Financial Bancorp, Inc.

On April 12, 2024, LCNB completed the acquisition of EFBI and the merger of EAGLE.bank with and into LCNB National Bank. EAGLE.bank operated three full-service banking offices in Cincinnati, Ohio.

With the addition of EFBI, LCNB now operates 36 full-service banking offices in Ohio and one branch office in Northern Kentucky. Assuming the transaction had been completed as of March 31, 2024, LCNB would have had total deposits of $1.99 billion and total loans of $1.79 billion at March 31, 2024.

About LCNB Corp.

LCNB Corp. is a financial holding company headquartered in Lebanon, Ohio. Through its subsidiary, LCNB National Bank (the “Bank”), it serves customers and communities in Southwest and South-Central Ohio and Northern Kentucky. A financial institution with a long tradition for building strong relationships with customers and communities, the Bank offers convenient banking locations in Butler, Clermont, Clinton, Fayette, Franklin, Hamilton, Montgomery, Preble, Ross, and Warren Counties, Ohio. The Bank also provides community-oriented banking services to customers in Northern Kentucky through a bank office in Boone County, Kentucky. The Bank continually strives to exceed customer expectations and provides an array of services for all personal and business banking needs including checking, savings, online banking, personal lending, business lending, agricultural lending, business support, deposit and treasury, investment services, trust and IRAs and stock purchases. LCNB Corp. common shares are traded on the NASDAQ Capital Market Exchange® under the symbol “LCNB.” Learn more about LCNB Corp. at www.lcnb.com.

Forward-Looking Statements

Certain statements made in this news release regarding LCNB’s financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions. Please refer to LCNB’s Annual Report on Form 10-K for the year ended December 31, 2023, as well as its other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of LCNB’s business and operations. Additionally, LCNB’s financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to:

  1. the success, impact, and timing of the implementation of LCNB’s business strategies;
  2. LCNB’s ability to integrate recent and future acquisitions may be unsuccessful or may be more difficult, time-consuming, or costly than expected;
  3. LCNB may incur increased loan charge-offs in the future and the allowance for credit losses may be inadequate;
  4. LCNB may face competitive loss of customers;
  5. changes in the interest rate environment, which may include further interest rate increases, may have results on LCNB’s operations materially different from those anticipated by LCNB’s market risk management functions;
  6. changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
  7. changes in regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact LCNB’s operating results;
  8. LCNB may experience difficulties growing loan and deposit balances;
  9. United States trade relations with foreign countries could negatively impact the financial condition of LCNB's customers, which could adversely affect LCNB's operating results and financial condition;
  10. global geopolitical relations and/or conflicts could create financial market uncertainty and have negative impacts on commodities and currency, which could adversely affect LCNB's operating results and financial condition;
  11. difficulties with technology or data security breaches, including cyberattacks, could negatively affect LCNB's ability to conduct business and its relationships with customers, vendors, and others;
  12. adverse weather events and natural disasters and global and/or national epidemics could negatively affect LCNB’s customers given its concentrated geographic scope, which could impact LCNB’s operating results; and
  13. government intervention in the U.S. financial system, including the effects of legislative, tax, accounting, and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Jumpstart Our Business Startups Act, the Consumer Financial Protection Bureau, the capital ratios of Basel III as adopted by the federal banking authorities, changes in deposit insurance premium levels, and any such future regulatory actions or reforms.

Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist shareholders and potential investors in understanding current and anticipated financial operations of LCNB and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. LCNB undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made.

Exhibit 99.2 

LCNB Corp. and Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

 

Three Months Ended

 

 

03-31-2024

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

03-31-2023

 

Condensed Income Statement

 

 

 

 

 

 

 

 

 

 

Interest income

$

24,758

 

 

$

23,310

 

 

 

19,668

 

 

 

18,703

 

 

 

17,918

 

 

Interest expense

 

10,863

 

 

 

8,651

 

 

 

6,097

 

 

 

4,526

 

 

 

3,976

 

 

Net interest income

 

13,895

 

 

 

14,659

 

 

 

13,571

 

 

 

14,177

 

 

 

13,942

 

 

Provision for (recovery of) credit losses

 

125

 

 

 

2,218

 

 

 

(114

)

 

 

30

 

 

 

(57

)

 

Net interest income after provision for (recovery of) credit losses

 

13,770

 

 

 

12,441

 

 

 

13,685

 

 

 

14,147

 

 

 

13,999

 

 

Non-interest income

 

3,929

 

 

 

4,606

 

 

 

3,578

 

 

 

3,646

 

 

 

3,581

 

 

Non-interest expense

 

15,472

 

 

 

17,576

 

 

 

12,244

 

 

 

12,078

 

 

 

12,525

 

 

Income (loss) before income taxes

 

2,227

 

 

 

(529

)

 

 

5,019

 

 

 

5,715

 

 

 

5,055

 

 

Provision for (benefit from) income taxes

 

312

 

 

 

(236

)

 

 

949

 

 

 

1,021

 

 

 

898

 

 

Net income (loss)

$

1,915

 

 

$

(293

)

 

$

4,070

 

 

$

4,694

 

 

 

4,157

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Income Statement Information

 

 

 

 

 

 

 

 

 

Amort/Accret income on acquired loans

$

776

 

 

$

410

 

 

 

 

 

 

 

 

 

75

 

 

Tax-equivalent net interest income

$

13,933

 

 

$

14,703

 

 

 

13,617

 

 

 

14,223

 

 

 

13,989

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.22

 

 

$

0.22

 

 

 

0.21

 

 

 

0.21

 

 

 

0.21

 

 

Basic earnings (loss) per common share

$

0.15

 

 

$

(0.02

)

 

 

0.37

 

 

 

0.42

 

 

 

0.37

 

 

Diluted earnings (loss) per common share

$

0.15

 

 

$

(0.02

)

 

 

0.37

 

 

 

0.42

 

 

 

0.37

 

 

Book value per share

$

17.67

 

 

$

17.86

 

 

 

18.10

 

 

 

18.20

 

 

 

18.22

 

 

Tangible book value per share

$

11.03

 

 

$

11.16

 

 

 

12.72

 

 

 

12.81

 

 

 

12.86

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

13,112,302

 

 

 

12,378,289

 

 

 

11,038,720

 

 

 

11,056,308

 

 

 

11,189,170

 

 

Diluted

 

13,112,302

 

 

 

12,378,289

 

 

 

11,038,720

 

 

 

11,056,308

 

 

 

11,189,170

 

 

Shares outstanding at period end

 

13,224,276

 

 

 

13,173,569

 

 

 

11,123,382

 

 

 

11,116,080

 

 

 

11,202,063

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.34

%

 

 

(0.05

)%

 

 

0.82

%

 

 

0.98

%

 

 

0.88

%

 

Return on average equity

 

3.28

%

 

 

(0.53

)%

 

 

7.92

%

 

 

9.22

%

 

 

8.33

%

 

Return on average tangible common equity

 

4.39

%

 

 

(0.72

)%

 

 

11.21

%

 

 

13.07

%

 

 

11.85

%

 

Dividend payout ratio

 

146.67

%

 

 

NM

 

 

 

56.76

%

 

 

50.00

%

 

 

56.76

%

 

Net interest margin (tax equivalent)

 

2.72

%

 

 

2.99

%

 

 

3.04

%

 

 

3.28

%

 

 

3.28

%

 

Efficiency ratio (tax equivalent)

 

86.62

%

 

 

91.02

%

 

 

71.21

%

 

 

67.59

%

 

 

71.29

%

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

32,951

 

 

$

39,723

 

 

 

43,422

 

 

 

26,020

 

 

 

31,876

 

 

Debt and equity securities

 

306,775

 

 

 

318,723

 

 

 

309,094

 

 

 

314,763

 

 

 

328,194

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

122,229

 

 

$

120,411

 

 

 

125,751

 

 

 

127,553

 

 

 

124,240

 

 

Commercial, secured by real estate

 

1,099,601

 

 

 

1,107,556

 

 

 

981,787

 

 

 

961,173

 

 

 

932,208

 

 

Residential real estate

 

398,250

 

 

 

459,073

 

 

 

313,286

 

 

 

312,338

 

 

 

303,051

 

 

Consumer

 

24,137

 

 

 

25,578

 

 

 

27,018

 

 

 

29,007

 

 

 

28,611

 

 

Agricultural

 

12,647

 

 

 

10,952

 

 

 

11,278

 

 

 

9,955

 

 

 

7,523

 

 

Other, including deposit overdrafts

 

73

 

 

 

82

 

 

 

80

 

 

 

69

 

 

 

62

 

 

Deferred net origination fees

 

(583

)

 

 

(181

)

 

 

(796

)

 

 

(844

)

 

 

(865

)

 

Loans, gross

 

1,656,354

 

 

 

1,723,471

 

 

 

1,458,404

 

 

 

1,439,251

 

 

 

1,394,830

 

 

Less allowance for credit losses

 

10,557

 

 

 

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

7,858

 

 

Loans, net

$

1,645,797

 

 

 

1,712,946

 

 

 

1,450,472

 

 

 

1,431,295

 

 

 

1,386,972

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

75,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NM - Not Meaningful

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

03-31-2024

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

03-31-2023

 

Selected Balance Sheet Items, continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses on Loans:

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses, beginning of period

$

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

7,858

 

 

 

5,646

 

 

Cumulative change in accounting principle - ASC 326

 

 

 

 

 

 

 

 

 

 

 

 

 

2,196

 

 

Fair value adjustment for purchased credit deteriorated loans

 

 

 

 

493

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

77

 

 

 

2,203

 

 

 

9

 

 

 

131

 

 

 

32

 

 

Losses charged off

 

(78

)

 

 

(126

)

 

 

(57

)

 

 

(49

)

 

 

(36

)

 

Recoveries

 

33

 

 

 

23

 

 

 

24

 

 

 

16

 

 

 

20

 

 

Allowance for credit losses, end of period

$

10,557

 

 

 

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

7,858

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets

$

1,971,130

 

 

$

2,045,382

 

 

 

1,787,796

 

 

 

1,756,157

 

 

$

1,736,829

 

 

Total assets

 

2,283,151

 

 

 

2,291,592

 

 

 

1,981,668

 

 

 

1,950,763

 

 

 

1,924,531

 

 

Total deposits

 

1,858,493

 

 

 

1,824,389

 

 

 

1,616,890

 

 

 

1,596,709

 

 

 

1,603,881

 

 

Short-term borrowings

 

10,000

 

 

 

97,395

 

 

 

30,000

 

 

 

112,289

 

 

 

76,500

 

 

Long-term debt

 

162,638

 

 

 

113,123

 

 

 

112,641

 

 

 

18,122

 

 

 

18,598

 

 

Total shareholders’ equity

 

233,663

 

 

 

235,303

 

 

 

201,349

 

 

 

202,316

 

 

 

204,072

 

 

Equity to assets ratio

 

10.23

%

 

 

10.27

%

 

 

10.16

%

 

 

10.37

%

 

 

10.60

%

 

Loans to deposits ratio

 

89.12

%

 

 

94.47

%

 

 

90.20

%

 

 

90.14

%

 

 

86.97

%

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity (TCE)

$

145,850

 

 

$

146,999

 

 

 

141,508

 

 

 

142,362

 

 

 

144,006

 

 

Tangible common assets (TCA)

 

2,195,338

 

 

 

2,203,288

 

 

 

1,921,827

 

 

 

1,890,809

 

 

 

1,864,457

 

 

TCE/TCA

 

6.64

%

 

 

6.67

%

 

 

7.36

%

 

 

7.53

%

 

 

7.72

%

 

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

51,366

 

 

$

49,436

 

 

 

36,177

 

 

 

30,742

 

 

 

35,712

 

 

Debt and equity securities

 

310,771

 

 

 

310,274

 

 

 

313,669

 

 

 

321,537

 

 

 

327,123

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

1,722,568

 

 

$

1,622,911

 

 

 

1,451,153

 

 

 

1,405,939

 

 

 

1,389,385

 

 

Less allowance for credit losses on loans

 

10,523

 

 

 

8,826

 

 

 

7,958

 

 

 

7,860

 

 

 

7,522

 

 

Net loans

$

1,712,045

 

 

 

1,614,085

 

 

 

1,443,195

 

 

 

1,398,079

 

 

 

1,381,863

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets, including loans held for sale

$

2,056,656

 

 

$

1,952,121

 

 

 

1,775,713

 

 

 

1,737,256

 

 

 

1,729,008

 

 

Total assets

 

2,294,766

 

 

 

2,182,477

 

 

 

1,971,269

 

 

 

1,927,956

 

 

 

1,921,742

 

 

Total deposits

 

1,824,546

 

 

 

1,759,677

 

 

 

1,610,508

 

 

 

1,604,346

 

 

 

1,583,857

 

 

Short-term borrowings

 

65,052

 

 

 

64,899

 

 

 

63,018

 

 

 

79,485

 

 

 

94,591

 

 

Long-term debt

 

150,177

 

 

 

115,907

 

 

 

72,550

 

 

 

18,514

 

 

 

18,983

 

 

Total shareholders’ equity

 

235,119

 

 

 

220,678

 

 

 

203,967

 

 

 

204,085

 

 

 

202,419

 

 

Equity to assets ratio

 

10.25

%

 

 

10.11

%

 

 

10.35

%

 

 

10.59

%

 

 

10.53

%

 

Loans to deposits ratio

 

94.41

%

 

 

92.23

%

 

 

90.11

%

 

 

87.63

%

 

 

87.72

%

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

Net charge-offs

$

45

 

 

$

102

 

 

 

33

 

 

 

33

 

 

 

16

 

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans

$

2,719

 

 

$

80

 

 

 

85

 

 

 

451

 

 

 

701

 

 

Loans past due 90 days or more and still accruing

 

524

 

 

 

72

 

 

 

176

 

 

 

256

 

 

 

 

 

Total nonperforming loans

$

3,243

 

 

 

152

 

 

 

261

 

 

 

707

 

 

 

701

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans

 

0.01

%

 

 

0.02

%

 

 

0.01

%

 

 

0.01

%

 

 

0.00

%

 

Allowance for credit losses on loans to total loans

 

0.64

%

 

 

0.61

%

 

 

0.54

%

 

 

0.55

%

 

 

0.56

%

 

Nonperforming loans to total loans

 

0.20

%

 

 

0.01

%

 

 

0.02

%

 

 

0.05

%

 

 

0.05

%

 

Nonperforming assets to total assets

 

0.14

%

 

 

0.01

%

 

 

0.01

%

 

 

0.04

%

 

 

0.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

03-31-2024

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

03-31-2023

 

 

 

 

 

 

 

 

 

 

 

 

Assets Under Management

 

 

 

 

 

 

 

 

 

 

LCNB Corp. total assets

$

2,283,151

 

 

 

2,291,592

 

 

 

1,981,668

 

 

 

1,950,763

 

 

 

1,924,531

 

 

Trust and investments (fair value)

 

890,800

 

 

 

806,770

 

 

 

731,342

 

 

 

744,149

 

 

 

716,578

 

 

Mortgage loans serviced

 

386,490

 

 

 

391,800

 

 

 

146,483

 

 

 

143,093

 

 

 

142,167

 

 

Cash management

 

13,314

 

 

 

2,375

 

 

 

2,445

 

 

 

2,668

 

 

 

1,831

 

 

Brokerage accounts (fair value)

 

411,211

 

 

 

392,390

 

 

 

368,854

 

 

 

384,889

 

 

 

374,066

 

 

Total assets managed

$

3,984,966

 

 

 

3,884,927

 

 

 

3,230,792

 

 

 

3,225,562

 

 

 

3,159,173

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income Less Tax-Effected Merger-Related Costs

 

 

 

 

 

Net income (loss)

$

1,915

 

 

 

(293

)

 

 

4,070

 

 

 

4,694

 

 

 

4,157

 

 

Merger expenses

 

775

 

 

 

3,914

 

 

 

302

 

 

 

415

 

 

 

25

 

 

Provision for credit losses on non-PCD loans

 

 

 

 

1,722

 

 

 

 

 

 

 

 

 

 

 

Tax effect

 

(90

)

 

 

(1,102

)

 

 

(3

)

 

 

(63

)

 

 

(4

)

 

Adjusted net income

$

2,600

 

 

 

4,241

 

 

 

4,369

 

 

 

5,046

 

 

 

4,178

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basic and diluted earnings per share

$

0.20

 

 

$

0.34

 

 

 

0.40

 

 

 

0.45

 

 

 

0.37

 

 

Adjusted return on average assets

 

0.46

%

 

 

0.77

%

 

 

0.88

%

 

 

1.05

%

 

 

0.88

%

 

Adjusted return on average equity

 

4.45

%

 

 

7.62

%

 

 

8.50

%

 

 

9.92

%

 

 

8.37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

Three Months Ended December 31,

 

 

2024

 

2023

 

2023

 

 

Average

Outstanding

Balance

 

Interest

Earned/

Paid

 

Average

Yield/

Rate

 

Average

Outstanding

Balance

 

Interest

Earned/

Paid

 

Average

Yield/

Rate

 

Average

Outstanding

Balance

 

Interest

Earned/

Paid

 

Average

Yield/

Rate

Loans (1)

 

$

1,722,568

 

 

22,682

 

 

5.30

%

 

$

1,389,385

 

 

16,143

 

4.71

%

 

$

1,622,911

 

 

21,113

 

5.16

%

Interest-bearing demand deposits

 

 

23,317

 

 

324

 

 

5.59

%

 

 

12,500

 

 

157

 

5.09

%

 

 

18,936

 

 

280

 

5.87

%

Federal Reserve Bank stock

 

 

5,509

 

 

(4

)

 

(0.29

)%

 

 

4,652

 

 

 

%

 

 

4,930

 

 

144

 

11.59

%

Federal Home Loan Bank stock

 

 

16,239

 

 

341

 

 

8.45

%

 

 

6,796

 

 

62

 

3.70

%

 

 

12,607

 

 

273

 

8.59

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

4,995

 

 

40

 

 

3.22

%

 

 

4,337

 

 

37

 

3.46

%

 

 

4,415

 

 

62

 

5.57

%

Debt securities, taxable

 

 

265,164

 

 

1,232

 

 

1.87

%

 

 

286,369

 

 

1,343

 

1.90

%

 

 

265,736

 

 

1,273

 

1.90

%

Debt securities, non-taxable (2)

 

 

18,864

 

 

181

 

 

3.86

%

 

 

24,969

 

 

223

 

3.62

%

 

 

22,586

 

 

209

 

3.67

%

Total earnings assets

 

 

2,056,656

 

 

24,796

 

 

4.85

%

 

 

1,729,008

 

 

17,965

 

4.21

%

 

 

1,952,121

 

 

23,354

 

4.75

%

Non-earning assets

 

 

248,633

 

 

 

 

 

 

 

200,256

 

 

 

 

 

 

 

239,182

 

 

 

 

 

Allowance for credit losses

 

 

(10,523

)

 

 

 

 

 

 

(7,522

)

 

 

 

 

 

 

(8,826

)

 

 

 

 

Total assets

 

$

2,294,766

 

 

 

 

 

$

1,921,742

 

 

 

 

 

 

$

2,182,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand and money market deposits

 

$

643,199

 

 

3,917

 

 

2.45

%

 

$

505,382

 

 

1,245

 

1.00

%

 

$

574,349

 

 

2,710

 

1.87

%

Savings deposits

 

 

368,049

 

 

206

 

 

0.23

%

 

 

415,873

 

 

139

 

0.14

%

 

 

402,791

 

 

323

 

0.32

%

IRA and time certificates

 

 

370,130

 

 

4,067

 

 

4.42

%

 

 

185,297

 

 

1,072

 

2.35

%

 

 

302,434

 

 

3,321

 

4.36

%

Short-term borrowings

 

 

65,052

 

 

935

 

 

5.78

%

 

 

94,591

 

 

1,304

 

5.59

%

 

 

64,899

 

 

918

 

5.61

%

Long-term debt

 

 

150,177

 

 

1,738

 

 

4.65

%

 

 

18,983

 

 

216

 

4.61

%

 

 

115,907

 

 

1,379

 

4.72

%

Total interest-bearing liabilities

 

 

1,596,607

 

 

10,863

 

 

2.74

%

 

 

1,220,126

 

 

3,976

 

1.32

%

 

 

1,460,380

 

 

8,651

 

2.35

%

Demand deposits

 

 

443,168

 

 

 

 

 

 

 

477,305

 

 

 

 

 

 

 

480,103

 

 

 

 

 

Other liabilities

 

 

19,872

 

 

 

 

 

 

 

21,892

 

 

 

 

 

 

 

21,316

 

 

 

 

 

Equity

 

 

235,119

 

 

 

 

 

 

 

202,419

 

 

 

 

 

 

 

220,678

 

 

 

 

 

Total liabilities and equity

 

$

2,294,766

 

 

 

 

 

 

$

1,921,742

 

 

 

 

 

 

$

2,182,477

 

 

 

 

 

Net interest rate spread (3)

 

 

 

 

 

2.11

%

 

 

 

 

 

2.89

%

 

 

 

 

 

2.40

%

Net interest income and net interest margin on a taxable-equivalent basis (4)

 

 

 

13,933

 

 

2.72

%

 

 

 

13,989

 

3.28

%

 

 

 

14,703

 

2.99

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

128.81

%

 

 

 

 

 

 

141.71

%

 

 

 

 

 

 

133.67

%

 

 

 

 

(1)

Includes non-accrual loans and loans held for sale

(2)

Income from tax-exempt securities is included in interest income on a taxable-equivalent basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 21%.

(3)

The net interest spread is the difference between the average rate on total interest-earning assets and interest-bearing liabilities.

(4)

The net interest margin is the taxable-equivalent net interest income divided by average interest-earning assets.

 

Exhibit 99.2

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

 

March 31,

2024

(Unaudited)

 

December 31,

2023

ASSETS:

 

 

 

Cash and due from banks

$

24,950

 

 

 

36,535

 

Interest-bearing demand deposits

 

8,001

 

 

 

3,188

 

Total cash and cash equivalents

 

32,951

 

 

 

39,723

 

Investment securities:

 

 

 

Equity securities with a readily determinable fair value, at fair value

 

1,334

 

 

 

1,336

 

Equity securities without a readily determinable fair value, at cost

 

3,666

 

 

 

3,666

 

Debt securities, available-for-sale, at fair value

 

262,786

 

 

 

276,601

 

Debt securities, held-to-maturity, at cost, net of allowance for credit losses of $5 and $5 at March 31, 2024 and December 31, 2023, respectively

 

16,746

 

 

 

16,858

 

Federal Reserve Bank stock, at cost

 

5,774

 

 

 

5,086

 

Federal Home Loan Bank stock, at cost

 

16,469

 

 

 

15,176

 

Loans, net of allowance for credit losses of $10,557 and 10,525 at March 31, 2024 and December 31, 2023, respectively

 

1,645,797

 

 

 

1,712,946

 

Loans held for sale

 

75,581

 

 

 

 

Premises and equipment, net

 

36,690

 

 

 

36,302

 

Operating lease right-of-use assets

 

5,838

 

 

 

6,000

 

Goodwill

 

79,559

 

 

 

79,509

 

Core deposit and other intangibles, net

 

8,903

 

 

 

9,494

 

Bank-owned life insurance

 

50,165

 

 

 

49,847

 

Interest receivable

 

9,115

 

 

 

8,405

 

Other assets, net

 

31,777

 

 

 

30,643

 

TOTAL ASSETS

$

2,283,151

 

 

 

2,291,592

 

 

 

 

 

LIABILITIES:

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

435,580

 

 

 

462,267

 

Interest-bearing

 

1,422,913

 

 

 

1,362,122

 

Total deposits

 

1,858,493

 

 

 

1,824,389

 

Short-term borrowings

 

10,000

 

 

 

97,395

 

Long-term debt

 

162,638

 

 

 

113,123

 

Operating lease liabilities

 

6,123

 

 

 

6,261

 

Accrued interest and other liabilities

 

12,234

 

 

 

15,121

 

TOTAL LIABILITIES

 

2,049,488

 

 

 

2,056,289

 

 

 

 

 

COMMITMENTS AND CONTINGENT LIABILITIES

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

Preferred shares – no par value, authorized 1,000,000 shares, none outstanding

 

 

 

 

 

Common shares – no par value; authorized 19,000,000 shares; issued 16,435,659 and 16,384,952 shares at March 31, 2024 and December 31, 2023, respectively; outstanding 13,224,276 and 13,173,569 shares at March 31, 2024 and December 31, 2023, respectively

 

174,082

 

 

 

173,637

 

Retained earnings

 

139,050

 

 

 

140,017

 

Treasury shares at cost, 3,211,383 and 3,211,383 shares at March 31, 2024 and December 31, 2023, respectively

 

(56,015

)

 

 

(56,015

)

Accumulated other comprehensive loss, net of taxes

 

(23,454

)

 

 

(22,336

)

TOTAL SHAREHOLDERS' EQUITY

 

233,663

 

 

 

235,303

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

2,283,151

 

 

$

2,291,592

 

Exhibit 99.2 

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

 

Three Months Ended

March 31,

 

 

 

2024

 

 

2023

 

INTEREST INCOME:

 

 

 

 

Interest and fees on loans

$

22,682

 

 

16,143

 

 

Dividends on equity securities:

 

 

 

 

With a readily determinable fair value

 

9

 

 

17

 

 

Without a readily determinable fair value

 

31

 

 

20

 

 

Interest on debt securities:

 

 

 

 

Taxable

 

1,232

 

 

1,343

 

 

Non-taxable

 

143

 

 

176

 

 

Other investments

 

661

 

 

219

 

 

TOTAL INTEREST INCOME

 

24,758

 

 

17,918

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

Interest on deposits

 

8,190

 

 

2,456

 

 

Interest on short-term borrowings

 

935

 

 

1,304

 

 

Interest on long-term debt

 

1,738

 

 

216

 

 

TOTAL INTEREST EXPENSE

 

10,863

 

 

3,976

 

 

NET INTEREST INCOME

 

13,895

 

 

13,942

 

 

 

 

 

 

 

PROVISION FOR (RECOVERY OF) CREDIT LOSSES

 

125

 

 

(57

)

 

NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) CREDIT LOSSES

 

13,770

 

 

13,999

 

 

 

 

 

 

 

NON-INTEREST INCOME:

 

 

 

 

Fiduciary income

 

1,973

 

 

1,740

 

 

Service charges and fees on deposit accounts

 

1,384

 

 

1,482

 

 

Net gains from sales of debt securities, available-for-sale

 

(214

)

 

 

 

Bank-owned life insurance income

 

318

 

 

271

 

 

Net gains from sales of loans

 

522

 

 

6

 

 

Other operating income

 

(54

)

 

82

 

 

TOTAL NON-INTEREST INCOME

 

3,929

 

 

3,581

 

 

 

 

 

 

 

NON-INTEREST EXPENSE:

 

 

 

 

Salaries and employee benefits

 

8,554

 

 

7,349

 

 

Equipment expenses

 

390

 

 

361

 

 

Occupancy expense, net

 

1,005

 

 

963

 

 

State financial institutions tax

 

428

 

 

397

 

 

Marketing

 

174

 

 

192

 

 

Amortization of intangibles

 

236

 

 

111

 

 

FDIC insurance premiums, net

 

504

 

 

215

 

 

Contracted services

 

784

 

 

641

 

 

Merger-related expenses

 

775

 

 

25

 

 

Other non-interest expense

 

2,622

 

 

2,271

 

 

TOTAL NON-INTEREST EXPENSE

 

15,472

 

 

12,525

 

 

INCOME BEFORE INCOME TAXES

 

2,227

 

 

5,055

 

 

PROVISION FOR INCOME TAXES

 

312

 

 

898

 

 

NET INCOME

$

1,915

 

 

4,157

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

Basic

$

0.15

 

 

0.37

 

 

Diluted

$

0.15

 

 

0.37

 

 

Weighted average common shares outstanding:

 

 

 

 

Basic

 

13,112,302

 

 

11,189,170

 

 

Diluted

 

13,112,302

 

 

11,189,170

 

 

 

Contacts

Company Contact:

Eric J. Meilstrup

President and Chief Executive Officer

LCNB National Bank

(513) 932-1414

shareholderrelations@lcnb.com

Investor and Media Contact:

Andrew M. Berger

Managing Director

SM Berger & Company, Inc.

(216) 464-6400

andrew@smberger.com

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